Table of Contents

Mobile App Marketing : 8 Best Monetization Strategies

There are many ways to monetize your Mobile App.

To decide what fits you best, a thorough analysis of the competition is key.

First because you can identify what Monetization strategies they use, what they already have tested and what did not work.

Second because It will help you clarify what competitive advantage your app has and therefore what to communicate on.

Finally, before moving forward, make sure you run some simulations/cost analysis to ensure you will be able to generate some significant profit

Now let’s review my 8 Best Mobile App Monetization Strategies

1.Freemium Strategy


What is the Freemium Strategy?

Freemium mobile apps are free to download and users can access the app’s basic functionality. Some additional features can be unlocked by making a purchase.

It is widely popular. In fact, as of June 2020, over 96% of Apps follow this format (

When to use it

Since everybody likes free stuff, this strategy will allow you to build a large user base quickly through advocacy and is based on the Foot in the Door concept we already covered for success.

Once the user are regulars, the potential frictions of using the app are reduced, the trust has been established and it is easier to sell premium features or upsell.


This offers multiple monetization options like display Ads for Free users, Premium features and Upsell opportunities.

Free Apps are also more likely to receive positive reviews which is great for App Store Optimization (ASO).


It could be challenging to know what features should be given for free and which ones to sell. A thorough analysis of your potential audiences is key.

No upfront revenue. This is longer exercise that first starts by acquiring users to then have an opportunity to generate revenue.

Finally, free apps tend to have lower user loyalty which makes your activation and retention efforts harder.

Example : Evernote

Evernote is a great example of Freemium.

It is particularly interesting to see how they evolved their offer over the years to move from a Feature based approach in 2017 to a more User-focused Benefit approach in 2020.

2.Paid Apps Strategy

What is the Paid/Premium App Strategy?

The Paid App Strategy consists in charging the user to download and use the App

When to use it

Paid Apps work well when you already have a strong brand awareness, a solid followers base and an App with a strong competitive advantage.

Aiming for 5 star rating is key here as a proof to your apps superior value.

Although you can start selling your App for only $0.99, keep in mind that a higher price point is often associated with a higher perceived value.
Check out your competition and price yourself accordingly.


Upfront revenue.

Paid Apps usually have a higher perceived value and users are generally more loyal to Apps they pay for.

Higher user experience due to the absence of advertising


Only 20% of paid apps are downloaded more than 100 times, so consider this when you build your business model.

Even with lots of great reviews, people are less likely to purchase an App if they can’t try it out first. So, consider a timed free trial.

The LTV of your customers tend to be lower than the Freemium monetization model.

The Apple Store takes a significant margin on Paid Apps

Example : WolframAlpha

This app is like a math and science version of Wikipedia.

It’s an outstanding source of knowledge and computation about virtually anything, from basic algebra to the depths of the universe.

It’s like a search engine for algebra, physics, engineering, and so much more.

3.In-App Purchases Strategy

What is the In-App Purchases Strategy?

In-app purchases strategy refers to the offering of goods and services from inside the application.

In-app purchases allow developers to provide their applications for free and then advertise upgrades to the paid version or paid feature unlocks to turn a profit.

They can also advertise other apps and services to anyone who downloads the free version.

Despite that only 5% of app users spend money with in-app purchases, the total amount earned by companies from this method is 20 times greater than the sum provided by all the other methods together.

When to use it

This is ideal when the purchase in in-tune with and enhances the customer experience by adding value to their journey.


This strategy can be highly profitable when used properly.

Attracts large audience through Freemium to sell to later.


The app stores like Google Play and Apple store take a significant margin on the sales (30% as of July 2020)

Because in-app purchases are conducted through a mobile device, unauthorized purchases can result in security issues.

Example : Wordscapes

This in-app purchase help you play longer by giving you more credits at a discounted price.

Note also, that it is a limited time offer.

4.In-App Advertising Strategy


What is the In-App Advertising Strategy?

The goal of this strategy is to attract a large enough user base to attract advertisers to place Ads on the App and generate revenue.

Aps can take various format : Interstitial, Pop up or banner ads (left to right)

Source :

When to use it

It is usually used when in-app purchases would simply not fit within your App.


Collects a lot of valuable demographic and behavioral data.

Allows to offer your App for free and therefore get more users right away


To be effective, In-app ads need to be highly targeted and present the right offers to the right users.

Pop-up banners are often considered intrusive and pushy. Prefer Ads that are integrated within your content and complement it.

Apps containing Interstitial ads are considered by Google intrusive and therefore do not rank as high as the same app without these Ads.

Example : Lucky Charms filter on Snapchat

For St. Patrick’s Day, Lucky Charms decided to partner with Snapchat and design an interactive, gamified filter, to promote their new magical unicorns’ cereal.

Image source : click here

5.Partnership Strategy

What is the Partnership Strategy?

Sometimes, App owners whose user bases match, collaborate to offer each other rewards. This sponsorship version is, in this case, called partnership.

When to use it

When the APP naturally complement each other and offer an extended value to both audiences


It is an opportunity to quickly expand your reach and offer additional services you did not before.


If the partnership is not a good match, it can annoy your user base

Example : Nike and Headspace

Headspace a meditation App, expanded its content towards sports meditation that could benefit high-performance athletes.

For Nike, it is an opportunity for their users to enjoy their workout more as they get advice from Headspace to improve their running experience.

For  Headspace an expansion towards the sport audience.

It’s mutually beneficial

6.Sponsorship Strategy

What is the Sponsorship Strategy?

Sponsorship entails collaborating with advertisers who will provide rewards to your users when they complete certain in-app actions.

It could also be the use of the App skin or characters using the sponsor colors and logos for a limited and agreed period of time.

Since Apps use splash screens (loading screens when you start your App), this can also be branded in the name of the sponsor.

When to use it

When your App has a large audience and you have identified some commonality with the sponsor audience that make the combination a good fit


Expand your reach to an audience that shares similar point of interest with yours hence increasing the chance to gather more users.


This strategy is only possible if your user base is either big enough or specific enough to attract brands to pay for greater exposure to your audience.

Example : DIY Tip Genius

Here’s a version of  using the splash screen to sell space to sponsors

7.Subscription Strategy

What is the Subscription Strategy?

This strategy is based on providing a service and charging a subscription usually on a monthly or yearly basis.

A good strategy is to offer several subscription tiers with a mix of features and pricing.

This allows easier subscriptions through the lowest tier and potential upselling over time.

When to use it

This format is ideal for a service based App that encourages frequent use.


Easy to attract users since the App is Free to start with to convert to paid later on.


It can be challenging to identify how to separate the content between the various tiers.

A subscription model requires focusing both on converting users into subscribers and on keeping current subscribers from churning.

Example : Spotify

Spotify is a best in class example of successful subscription model.

As a freemium, Spotify manages to convert over 40% of its free users to premium vs 2.5% on average for other subscriptions model Apps.

The success lays in constant experimentation, A/B testing, and analysis of user data feeding into their product development, marketing, and app monetization strategies.

8.Commission Strategy

What is the Commission Strategy?

This is when your App charges a commission when it hosts a transaction.

Usually either a nominal fee or commission % on the sale

When to use it

When your App is geared towards sales and has the ability to centralize all sources of interest in one place for the user.


You do not have to own a product or service to sell it since you sell other companies’ goods.


You need to have a significant base to convince other brands to partner with you rather than going direct.

Example : Fandango

This app helps you find a movie near you, make online reservation for your ticket, get your e-ticket and takes a commission each time a ticket is sold.

Key metrics for the Monetization phase

Free to Paid Conversion Percentage.

This is the number of regular users that turn into paying users.

Purchasing Time Frame

How long did it take for users to become a paying user?

If your app is frequently used, consider offering premium features or special offers.

By analyzing the average purchase time, it enables you to find out when users are most interested in paying for additional features.

Related Articles


Table of Contents

Related Articles

Do you want more online revenue?

Just enter your email below to subscribe to my newsletter and GROW YOUR REVENUE

Marketing Permissions

Please confirm you would like to hear from Gilles Argivier LLC by:

You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit our website.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.

About Gilles Argivier

picture of Gilles Argivier standing with crossed arms

He is an International marketing expert and visionary entrepreneur.

For over 20 years, he has been entrusted by world class organizations as a driver of top and bottom line growth through transformational business development, brand’s sustainable strategy, product innovation and powerful online customer centric experiences

He owns and operates his marketing consultancy firm out of the US.

Main Articles

Do you want more online revenue?

Just enter your email below to subscribe to my newsletter and GROW YOUR REVENUE

Marketing Permissions

Please confirm you would like to hear from Gilles Argivier LLC by:

You can unsubscribe at any time by clicking the link in the footer of our emails. For information about our privacy practices, please visit our website.

We use Mailchimp as our marketing platform. By clicking below to subscribe, you acknowledge that your information will be transferred to Mailchimp for processing. Learn more about Mailchimp's privacy practices here.

grow your

Subscribe Now to get our latest Tips and Advice to Grow your Online Revenue